3 ‘new normal’ considerations for the retail supply chain

It's unlikely it will be 'business as usual' again for retailers – here are three ways things could change.
5 May 2020 | 10 Shares

Retailers must be flexible and ready to face the change. Source: Shutterstock

The retail economy will “bounce around for many months before settling into a new normal.”

That’s according to a new whitepaper by Bis Henderson Consulting, which sets out to forecast the long-lasting and “profound” implications of COVID-19 on the retail supply chain.

It asserts that many of the retail trends we saw in motion before the pandemic will be amplified and accelerated given the current disruption: “There will still be consumers, retailers and supply chains after Coronavirus, but it is unlikely to be ‘business as usual’,” said retail expert Louisa Hosegood, digital and strategy director at Bis Henderson Consulting and author of the report.

Retailers will have to show “true resilience” she added, and “embrace and exploit new opportunities as they emerge in a radically changed environment.”

Hosegood goes on to cite three trends that could gather pace in the current disruption, as laid out in the whitepaper entitled Preparing supply chains for a new retail landscape post Coronavirus.

# 1 | Conscious consumers

The whitepaper highlights the emergence of the ‘conscious consumer’ across all demographics. “Consumers are evaluating what counts as ‘essential purchases’, not just against lockdown rules but more widely against environmental, resource, and social concerns,” said Hosegood. 

“These include the climate change impacts of goods and their transportation; concerns over plastics – especially packaging – and waste more generally; ethical issues including modern slavery, human rights abuses and animal welfare; and a reaction against buying ‘disposable’ items intended for a short or even single-use life.” 

She adds: “We may see demand grow for goods to be repairable rather than replaceable, and developments in the leasing or rental of consumer durables, as an alternative to outright purchase.”

# 2 | Bricks versus clicks

Before the outbreak, online already accounted for some 21 percent of retail sales and lockdown rules have boosted the online share still further making e-commerce “commercially critical”. 

“[…] many small producers are now going D2C (direct to consumer) online, bypassing traditional retail outlets,” Hosegood said. 

Shopping habits are changing fast, and a significant portion of this new online trade is likely to stick, but other influences could pull in different directions. 

With consumers now used to minimizing shopping trips, we could see a boost in the ‘big weekly shop’ model. But that’s if consumers aren’t already drawn to a sense of community building in supporting more local, smaller shops first. Meanwhile, remote working is adding flexibility for customers booking online delivery slots. 

# 3 | Mixed media approach

Consumers will increasingly favour a ‘mixed media’ approach, combining the best of the online and physical shopping experiences, according to the whitepaper. “They may research and shortlist online […],” said Hosegood but “will continue to value the advice and guidance of a sales assistant, either in store or online.”

The impact of these trends and others will vary across retail sectors and over time. For physical retailers, “some fundamental re-imagining is required”, but all is not lost, while many online players, too, will have to adapt, as they try to make real profit out of increasingly discriminating and savvy consumers. 

Ultimately, the whitepaper suggests that retailers will have to show flexibility, agility and responsiveness – and that will be reflected in the retail supply chain itself. 

They will need to retain the capacity for innovation that has been evident in the current crisis. That applies in stores and on websites, but also in how and where goods are sourced, how they are produced, and where and how services, including logistics and distribution, are procured and structured. 

Critical too, will be the way retailers adapt their physical estate to support profitable retailing that meets constantly developing consumer requirements, across a mixed media, omnichannel landscape.